Monday, April 20, 2020

Day 39 of Nat'l Emergency: Back in the News

Have you ever talked with a reporter? I mean, for an on the record interview? Your name and all in print, or on the air?

It is among the most ego boosting of experiences, yet also among the most frightful. Will the reporter quote or paraphrase me correctly? Not just the actual words but, more importantly, the correct context in which I said them. Even if you submit written responses to questions context can be combustible. 

During my time as editor and publisher of Chain Store Age reporters often called for comment on the latest news or trends in retailing. I was happy to oblige, though wary they could easily, not purposely, misalign my input with their output (i.e., slant) they hoped to convey. Even the most perfect and beautiful publication, to use descriptors favored by Donald Trump, cannot always guard against opinions or subtle biases drifting into an article, either in the way questions are framed or in the way an answer is revealed. 

Long story short—Monday, I was quoted in by the Web site’s executive editor, Hank Gilman, in his weekly “On the Street” column ( Hank and I have a long history. He served as one of my field and associate editors in the early 1980s. From those “lofty” positions he went onto key posts at Fortune, The Wall Street Journal and the Boston Globe. 

(One of my proudest achievements has been my trade magazine’s role as a springboard for journalists on prestigious business publications. Aside from Hank’s sterling resume, another alumnus, Dan Scheraga, is currently the publishing editor of The Wall Street Journal. Joanne Gordon left Chain Store Age to join Forbes. She is now an author. After serving as my executive editor, Steve Malanga served 14 years as managing editor and executive editor of Crain’s New York Business. He currently is a contributing editor of City Journal. If you watch CNN, perhaps you’ve seen pieces by its technology editor Samantha Murphy Kelly. While she was simply Samantha Murphy she was Chain Store Age’s associate editor and Web editor.)

Back to the present. For those who didn’t bother to click on the earlier link, here’s the segment Hank devoted to the future of in store retailing. To those who read it, skip down to the next paragraph:

There Will Be Stores: I love speculating about the future, even when I have little to back it up. But I have to admit the ‘how life will be post-COVID-19’ predictions are getting a little tiresome. You know, we’ll never commute to work again. And we’ll just sit at home watching Netflix, President Trump’s daily briefings and ordering Papa John’s pizza online. Then there's in-person shopping, which everyone says is doomed. For you investor/shoppers and such, don’t despair. It will take some time—and a vaccine—but people will still go back to stores and malls. For one thing, cyber-retail is great but it may not be that great. Some are reportedly struggling with distribution, largely because of the pandemic demand. That wasn't supposed to happen. (I still shop in-person at the supermarket, mask on, and get my groceries and disinfectant wipes a lot sooner than my pals who queue up to shop on PeaPod.) To get to the bottom of this, I got in touch with my pal Murray Forseter, who now writes a business/politics/life blog. Murray, in another life covered retail for a living. (He wrote about Walmart when people actually liked Walmart.) His take: The stores and malls that have great service, ambiance, and unique products will still be in demand. Second tier malls and chains, like JCPenney are doomed—just like they were doomed before the pandemic. Furthermore, do you actually think people will be looking to spend more time with computers and smartphones after all this? Says Murray: ‘To believe that anyone can predict that in-store retailing will almost vanish, is to believe in Santa Claus.’ (And, by the way, what will happen to those guys if all the cheesy malls close?)”

I can’t find anything to fault in that tidbit, but to give you a fuller view of the thoughts I provided Hank, here’s what I emailed him: 

“To believe that anyone can predict what will happen to retailing, especially that in store retailing will almost vanish, is to believe in Santa Claus. Or in unicorns, Or that everything Donald Trump says is true (sorry, couldn’t resist that political jab).

I would suspect that anyone who predicts the demise of in store retailing has an urban orientation. More specifically, an upper middle class to upper class orientation. They also are more focused on apparel and home furnishings than on hardware, convenience store products, drug stores, and other stores that cater to people who need products right away and don’t want to wait for a delivery. Food stores, as well, from bodegas to Aldi-type discounters, to Trader Joe’s to full-fledged supermarkets will still be important though there may be some erosion, again focusing on the affluent shopper. 

Perhaps most important to the discussion on what will happen to retailing after the pandemic is over or at least controlled is that stores that cannot differentiate themselves from their competitors will fall. They need to differentiate based on price not so much but rather on service, product assortment and selection, location, in stock position (nice way of saying logistics/distribution), staffing, store ambiance—in general what makes a retailer a place you would want to spend some time in, whether it be for a grab and go purchase or a lengthy buying session. 

By the way, foodservice is another part of retailing. No way home delivery food tastes as good as the in restaurant experience. Of course, in restaurants and other retail formats there will be changes including at times limiting the number of customers/diners in an establishment and retaining shields at cash registers to protect cashiers, and eliminating salad bars and food tastings (much to the regret of Costco customers). 

There will be lots, lots of empty storefronts, but that was going to happen even before the new coronavirus struck. And lots of empty malls. Consumers will gravitate toward regional shopping centers, leaving B and C malls to go dark. Again, that was already happening. As a country we need to find secondary uses for these centers. I’ve always advocated turning them into senior housing, or low risk penal institutions, or, if high rise apartments can be built above them, mixed use housing complexes with the former mall turned into stores that sell convenience services like hair/nail salons, gyms, doctors’ offices, local theaters. 

There is much more I could say but this already is pretty long. Keep in mind when you talk about the amount of internet buying that it includes airline ticket purchases which have mostly replaced buying through an agent. Same thing for hotel and car rentals, and cruises if they manage to rebound. Actual old fashioned retailing, if I am still correct, is still 80-85% transacted in stores.”